Zenith To Issue Stock, Not Cash, For Its Retirement Plan

Zenith Electronics Corp. said it plans to issue about $6.2 million in stock, instead of cash, to its employee profit-sharing retirement plan.

The contribution will satisfy profit-sharing obligations to about 2,000 salaried employees and give workers a greater stake in future profits, the company said.

``I think it`s a good idea in that Zenith isn`t long on cash and their stock (price) is low,`` said Dennis Moran, an analyst with A.G. Edwards. ``If I were an employee and believed in the company`s future, I`d prefer to have the stock over the cash.``

Moran, who rates the stock a ``buy,`` said he believes Zenith will return to profitability soon.

This year Zenith faced a cash crisis until it negotiated a three-year, $60 million revolving-credit line with the Bank of New York, according to a Duff & Phelps report.

Zenith also has filed for a secondary offering of 8 million shares, but Moran is skeptical that the offering will occur, because of the company`s low stock price. Proceeds are to be used to redeem some of the company`s $34.5 million in debt.

Since January the company`s stock has fallen from a high of $10.62 to a low of $5.87. It closed Wednesday at $6.

Under Zenith`s profit-sharing retirement plan, the company contributes the equivalent of 6 percent of each member`s 1991 base pay into the fund. The number of shares to be issued will be based on the average closing price of Zenith`s stock for 20 trading days prior to the contribution.

The retirement fund will hold about 7 percent of Zenith`s 29.2 million shares outstanding.

For the first half of 1992, Zenith`s loss narrowed to $43.8 million, or $1.50 a share, from $50.6 million, or $1.77 a share, in the same period of 1991. Revenue declined to $545 million from $578.7 million.